California, one of the most solvent states is of course good for their debts/sarc.
This really should have been expected – a state-run bank accepting an insolvent, soon-to-be-bailed-out-state. Seems like monopoly money to me! This is similar to a false economy, where government interference and regulation make free markets anything but FREE/REAL.
Ponzi scheme has become my favorite catch phrase. It effectively seems as though California is issuing it’s own fake currency called IOUs, although it is already insolvent, to pay back at a later date – of which, will never happen. Bank of America is already suffering and got into trouble the last time it bought a toxic company and toxic assets, as did many others – but here it is doing the same thing again. Insanity = Doing the same thing over and over again, expecting different results.
Bank of America Corp. says it will accept warrants issued by California’s state government through July 10.
BofA says the state’s budget crisis prompted its decision.
“To support our customers, while giving the state legislature additional time to pass a budget, we will accept California state-registered warrants — or IOUs — from existing customers and clients,” Charlotte-based BofA (NYSE:BAC) says in a written statement.
It is always important to ask “Why” in these very odd and overwhelming times.
Why would Bank of America, who is already in financial trouble and dire straights, accept California IOUs, which it will probably never see? Why does this seem incredibly like the forced situation of Merrill Lynch? Is Bank of America doing this as a favor to the US government? Should I assume that Bank of America will get more bailout dollars if it accepts such a risky investment?
My biggest “beef” with this scenario: who is supporting Bank of America? The government! And where does the government get its money? The taxpayers! It’s not ok by me, that my money is being used to help bailout California due to its liberal/progressive policies that it enacted on the state.
“It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.” ~ Frédéric Bastiat 1801-1850 “The Law”
I guess we are supposed to feel sympathetic to Obama’s lack of sleep due to the deficit? Pardon me for saying so, but I couldn’t care less. He continues to sign these bills and propose legislation/policies which all require massive amounts of government funding. My sympathies are also few and far between because I too have not been sleeping. I’m actually up every night researching and writing to attempt to stay on top of the latest news items and stay abreast of all the crazy things this administration is doing. If possible I’d like to record every time Obama tramples on the constitution… Needless to say, that’s a lot of sleepless nights.
One of Obama’s agenda items is his health-care plan which is a deceitful little gem…passed off as a competitive option to private industry, when intelligent individuals who have contracted with the government already know, anything that competes with the government loses.
His health-care plan is therefore a farce and it will require individuals who work for a living and pay taxes, to pay for those who do not. It’s another entitlement program that will raise taxes and put a massive burden on all Americans.
President Barack Obama said he is “confident” that he won’t have to raise taxes on most Americans to close the budget deficit as long as the economy picks up steam.
“One of the biggest variables in this whole thing is economic growth,” the president said in an interview with Bloomberg News at the White House. “If we are growing at a robust rate, then we can pay for the government that we need without having to raise taxes.”
Obama has repeatedly said he would keep his campaign pledge to cut taxes for 95 percent of working Americans while rolling back tax breaks for households making more than $250,000 a year.
“I’m confident that we don’t have to raise taxes on ordinary working families,” he said.
But he already has. He raised taxes on cigarettes, a product that most lower income households consume. Food products, and other goods have also had taxes tacked onto them. Obama’s plan may not be to outright raise taxes, but they are already hiding them in miscellaneous goods. Obama’s health-care plan also paints an entirely different story, requiring $600 billion in new taxes to fund
the program. I’m not sure if Obama is completely deluded, a great liar, or both.
The fact that Obama believes that we will have incredible amounts of economic growth, when Forbes and others have already compiled a list and conducted studies on future GDP growth for those countries with a moderate to larger sized economies – proving that the United States and the United Kingdom would be two of the most repressed/stagnant, is just ludicrous. Obama recently told Bloomberg that he expected the unemployment rate to go to 10%, and although it is a lagging economic indicator, you cannot expect an unemployment rate to go back down to below 4% in 6 months when it took almost 18 to get there. Roubini also doesn’t believe that the unemployment rate will stop at 10% but rather upwards to 11% by year end. Roubini also predicts that we could see another recession in the future if the proper actions are taken by the government and the Federal Reserve. I have absolutely no confidence in either entity and Roubini fears that if the correct actions are taken now, we could wind up in an inflationary crisis over the next couple of years – of which I believe to be inevitable.
The stimulus package was one of the biggest crises driven, pay-to-play politics schemes in the history of this nation. Our country already has an example of what works and what does not during a recession. We can look back at the Great Depression and see that FDR’s actions of more government control/intervention and spending didn’t even begin to work until we began WWII, ramping up production of military equipment for other countries who were overspent. Nothing that FDR did directly stimulated the economy and it took 8-9 years to get there. Reagan, on the other hand, who was elected during another time of tremendous economic turmoil cut taxes, cut the size of government, and curtailed spending until we were out of the inflationary recession. His actions even took time, but not as long as 9 years – more like 1-2. This is what I do not understand? Why do liberals think you can resolve your debt problems by spending more money that you don’t have – where is the common sense?
The same thing is bound to happen in this scenario once deflation runs its course. There will be inflation and there is still the very real possibility that it could be hyperinflation – maybe not as high of a chance but still feasible given the volatility. There are several estimates that the bond market is on the brink of imploding; if that happens it will take everything else down with it! Sorry to be a negative Nancy but take a look at the below video clip – this guy is very intelligent:
Of course the administration wants to sell their little (and by little I mean massive) piece of legislation to the public to make it appear as though it’s working and that they didn’t just pay off their cronies for last year’s campaign contributions, ensuring more votes the next election cycle. So the administration puts out a booklet marking the 100th day anniversary of the dreaded (to us fiscal conservatives) stimulus. He of course touts it as the best thing since sliced bread, so whatever is stated as fact in that booklet should be checked and double checked. Propaganda abounds in the Democrat party, that’s not to say that it doesn’t in the Republican party either, but I have not seen the likes of the indoctrination or the Pravda media campaign for the Dems since I was eligible to vote!
Without question the book lists many projects that are having an impact of one way or another on the economy.
But the first one of the projects featured in “100 Days, 100 Projects” doesn’t seem to withstand the scrutiny of its description.
The project is described by the Obama administration this way:
“Using $27 million of Recovery Act funding, a public housing development in Washington, D.C., the Regency House, has undergone a green retrofit. As part of this upgrade, the building installed solar panels, a ‘green’ roof, a rainwater collection system, energy-efficient lighting as well as water conserving toilets, showerheads, and faucets. The greening of this building will allow the Regency House to save money in energy costs, while lessening their impact on the environment.”
In reality, the work done on the Regency House that was funded by the stimulus package amounted to $59,000 in parts and labor, according to Dena Michaelson, director of public affairs for the Washington DC Housing Authority.
The $27 million is the total amount given by the stimulus act to the Washington DC Housing Authority, the vast majority of which hasn’t been spent.
In addition, though the White House’s “100 Days, 100 Projects” entry for the Regency House work lists “solar panels, a ‘green’ roof, a rainwater collection system, energy-efficient lighting as well as water conserving toilets, showerheads, and faucets” as what was done as “part of the upgrade,” the only parts funded by the stimulus were the solar panels, at a cost of $45,000, and the rainwater collection system, at a cost of $14,000.
The response of the White House to questions about the claim in the book evoked a critique of journalists.
Liz Oxhorn, Recovery Act Press Secretary, said in a statement that the Regency House work is “one of thousands of targeted investments we’re making nationwide to jumpstart new and ongoing energy efficiency renovations to public housing units and we only wish the same amount of time and energy that has gone into dissecting the structure of three sentences had gone into exploring the billions of dollars in new job-creating projects like this one now underway thanks to the Recovery Act.”
Michaelson said that installation of the solar panels necessitated 330 total man hours: 202 man hours for plumbers and helpers, 40 man hours for electricians, 50 man hours for welders, 30 man hours for superintendents, and eight man hours for a crane operator.
The booklet also mentions the “police academy graduates in Ohio” whose graduation ceremony President Obama attended in March, heralding how the stimulus enabled the city of Columbus to hire 25 cadets.
But this week Police Chief Walter Distelzweig told the Columbus Dispatch that unless residents approve a tax increase, those 25 cadets face the real possibility of layoffs.
And what good does the stimulus have on jobs if they are willing to, in the future, tear down other sectors of the economy like energy/coal production, the auto industry, the financials, health care, etc. Or what if they pass amnesty for 12 million illegal aliens in the fall – how much stimulus will we really have if we already have double digit unemployment, but we allow more in? There is something inherentlywrong with the logic of all of this.
Treasury Secretary Tim Geithner, who just finished testifying before Sen. Chris Dodd’s (D-Conn.) Senate Banking committee, said that “it’s not fair” that AIG counter-parties are getting paid 100 cents on the dollar by government bailout money but “if I felt there was a better way…I would support it.”
Geithner was responding to tart questioning by Sen. Mark Warner (D-Va.) asking why, when others owed money by the troubled insurance giant are taking “haircuts,” the counter-parties (such as Goldman Sachs) are getting all the money owed to them.
“It is an incredibly difficult balance and it is very hard to know if we’re going to get the balance right,” Geithner said. AIG has received or been promised more than $150 billion in bailout money.
Geither got his anger up at one point, saying that, “I would not give a penny to AIG to protect counter-parties” if he didn’t have pay them to reduce the risk to pensions and other taxpayer-related funds that have done business with AIG and that are owed money by the company.
GOP Senator Hammers Geithner
11:29 A.M.: Geithner was hammered by a Republican senator decrying Treasury’s growing power over the American economy.
“This is not mission-creep,” said Sen. Jim DeMint (R-S.C.). “This is a stampede of any traditional understanding of constitutional boundaries.”
DeMint called Geithner the chief executive of the American economy. And he didn’t mean it in a good way.
DeMint complained that “we hear very little talk about exit strategies.” He asked Geithner how much of the $700 billion government bailout will be returned to Treasury’s general fund within five to six years.
“That’s hard to say right now,” Geithner said, deflecting: “If we are successful, that money will come back with substantial interest.”
Geithner added that the way the bailout was designed, for each $1 that is paid back, $1 can be lent back out.
“So it’s your understanding that you have $700 billion to use permanently as you see fit?” DeMint asked incredulously.
Geithner wouldn’t take the bait. “I’m not quite sure ‘permanently’ is right,” he said.
Rest of the questioning from other Republicans can be found here.
Later Geithner pulled a Clinton and asked what the definition of permanently is… j/k!
